Weekend Reading – Can the Market Sustain Itself?

Posted on the 19 May 2013 by Phil's Stock World @philstockworld

Just look at our Big Chart – we flipped it bullish and put up new level targets just two weeks ago and already the Russell is up 5% to test 1,000.  All 3 lines over 1,000 and we're back to being bullish until 3 of 5 fail to hold our "Must Hold" lines.  

We should be celebrating this but we played too cautiously as what we thought was a top and I never officially put "5 Inflation Fighters Set to Fly" or our "5 Trade Ideas that Make (made) 500% in an up Market" into our portfolios and I only said:

So lots of fun ways to participate in the next mega-rally.  We don't need S&P 1,900 – just holding 1,600 would do us quite well and I cannot emphasize enough that these are HEDGES to our current BEARISH stance – just in case we're wrong and a correction never comes and the markets go up and up forever and all of our bearish positions expire worthless.

In reviewing those posts, I realize I went heavily into detail about my thoughts of the current market environment and we decided we'd better go with the flow until the flow changes and, frankly, I don't have a lot to add to that.  A week ago we reviewed our "5 Trade Ideas" that made ridiculous amounts of money in a very short time but, as I have been reminded this weekend – unless I specifally state something should be included in one of our virtual portfolios – it doesn't occur to people that they should add it to theirs so we have been out of balance bearish in our portfolios and have gotten hit pretty hard in this relentlessly climbing market.  

That's my fault then and my solution is to make things less confusing and go back to my favorite system for managing trades and that's to have a portfolio for short-term trading and one for long-term trading (the Income Portfolio is a separate strategy and won't be affected) and we'll be instituting that beginning next week.  The idea is to practice the basics – position sizing, scaling in, scaling out, using stops, reacting to news, diversifying positions, etc.  The Long-Term Portfolio is generally for short-term positions that don't work but that we would like to stick


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